FINANCING NORMS AND SCHEMES

Transcription

1 FINANCING NORMS AND SCHEMES Doc. No. IREDA/FG/Part-1 Issue No. 02 Updated upto

2 Table of Contents 1. SECTORS ELIGIBLE FOR ASSISTANCE TYPES OF SCHEMES GENERAL ELIGIBILITY CONDITIONS MINIMUM LOAN AMOUNT PROMOTER CONTRIBUTION, QUANTUM OF LOAN, MORATORIUM AND REPAYMENT PERIOD CREDIT RATING, INTEREST RATES & RESET SPECIAL EFFORTS & CONCESSIONS RELATING TO SPECIAL STATES/ BACKWARD/ RURAL AREAS, SC/ST, WOMEN ENTREPRENEURS, ETC POLICY ON PRE-PAYMENT CHARGES FOR LIQUIDATED DAMAGES SCHEDULE OF FEES NORMS UNDER CONSORTIUM/CO-FINANCING NEW FUND AND NON FUND BASED FINANCING SCHEMES i. Line of Credit to Non-Banking Financial Companies (NBFCs) for on- lending to RE/ EEC Projects21 ii. Short term loan assistance to RE Developers/Suppliers/Contractors iii. Bridge loan assistance to RE Developers against Capital Subsidies/VGF/GBI available under various State/Central Govt. Schemes iv. Policy on Underwriting of Debt/Loan Syndication v. Guarantee Assistance Scheme to RE Suppliers/EPC Contractors /Manufacturers vi. IREDA to take up role of Lead FI 24 vii. Direct Discounting of MNRE Capital Subsidy payable to Accredited Channel Partners and State Nodal Agencies (SNA) for installation of Solar Water Heating Systems.25 viii. Direct Discounting of GBI Claims Payable to Renewable Energy Developers under MNRE Scheme for Generation Based Incentive (GBI) for grid interactive Wind and Solar power projects.27 ix. Loan Scheme For Financing Rooftop Solar Pv Grid Connected/ Interactive Power Projects (Industrial, Commercial and Institutional) 28 x. IREDA Scheme for discounting of Energy Bills 33 IREDA s Financing Norms & Schemes _ June 2016 Page 1 of 36

3 All the projects in Renewable Energy (RE), Energy Efficiency/ Conservation and other environmental sustainable technologies, including Power Generation, Transmission, Renovation & Modernization, which are techno-commercially viable, are eligible to obtain finance from IREDA. The eligible sectors are as under- Wind Energy Hydro Power Solar Energy Biomass including Bagasse & Industrial Cogeneration Biomass Power Generation Waste to Energy Energy Efficiency & Energy Conservation Bio-fuel / Alternate Fuel Including Ethanol & Bio -Diesel Hybrid Projects with RE Technologies New & Emerging Renewable Energy Technologies Notes Wind Energy Machine types eligible (Wind Electric Generator - WEG) for financing wind projects will be as per Revised List of Models and Manufacturers (RLMM) of Wind Turbines issued by Centre for Wind Energy Technology (C-WET) Hydro Power 1. SECTORS ELIGIBLE FOR ASSISTANCE IREDA finance to medium and large hydro projects (above 25 MW) would be only in consortium/ co-finance mode with other lenders Biomass including Bagasse & Industrial Cogeneration Use of high energy efficient equipment in sugar / paper mills for supporting Co-generation projects are encouraged. In case of Sugar Mill, the minimum size of Sugar Plant should be 2500 TCD. If alternate fuel is required for extension of operating days in a year, fossil fuels up to 15% of annual fuel consumption is allowed In case of project size up to 5.0 MW (except sugar industry), the minimum applicable boiler pressure will be 42 kg/ cm2 In case of project size above 5.0 MW (Both for Sugar and Non-Sugar Industry), the minimum applicable boiler pressure will be 63 Kg/cm2 IREDA s Financing Norms & Schemes _ June 2016 Page 2 of 36

4 Biomass Power Generation IREDA shall finance not more than one independent Biomass Power Project excluding captive Biomass/ Bagasse based Co-generation, in one district whether funded by IREDA/ other FIs. Biomass direct combustion power projects exceeding 7.5 MW capacity up to a maximum of 10 MW, will be considered on case to case basis subject to careful examination, particularly with reference to Biomass availability, presence of other Biomass power/ Biomass cogeneration projects in that area, linkage for off-season fuel, water availability etc. and the loan from IREDA shall not exceed loan for 7.5 MW of the project. However, IREDA may also consider projects exceeding 7.5 MW upto maximum of 10 MW on a 70: 30 debt equity ratio and may take exposure upto 70 % of project cost subject to the condition that the promoter shall bring in upfront 75 % of their contribution. Projects set up for captive consumption without grid inter-connectivity are encouraged Projects based on captive biomass/ energy plantation are encouraged Use of high energy efficient equipment in Biomass Power Plants are encouraged Bio-fuel / Alternate Fuel Including Ethanol & Bio- Diesel IREDA loan is available only for projects for oil extraction & transesterification process In case of fuel cells, IREDA loan is available for power/ vehicle applications only Waste to Energy Loan is restricted to energy generation system and excludes pre-fuel processing system Grid Inter-connection Facility for RE Evacuation / Transmission /Distribution facility IREDA shall extend term loan for 100% of eligible equipment cost limited to a maximum of 70% of total project cost. The above loan shall be applicable to all grid connected power projects Miscellaneous RE/EE Proposals not covered in the above will be considered for financing on the individual merit basis. IREDA s Financing Norms & Schemes _ June 2016 Page 3 of 36

5 2. TYPES OF SCHEMES I. Project Financing II. Equipment Financing III. Loans for Manufacturing IV. Financial Intermediaries V. Financing of commissioned projects including takeover of Loans from other Banks / FIs. VI. Additional / Bridge Loan against SDF Loan VII. Loan against Securitization New fund and non-fund based financing schemes I. Line of Credit to Non-Banking Financial Companies (NBFCs) for on- lending to RE/ EEC Projects. II. Short term loan assistance to RE Developers/Suppliers/Contractors. III. Bridge loan assistance to RE Developers against Capital Subsidies/VGF/GBI available under various State/Central Govt. Schemes. IV. Policy on Underwriting of Debt/Loan Syndication. V. Guarantee Assistance Scheme to RE Suppliers/Manufacturers/EPC Contractors VI. IREDA to take up the role of lead FI under Consortium/Syndicated Loans/ Multi banking arrangements by charging Lead Fee VII. Direct Discounting of GBI Claims Payable to Renewable Energy Developers under MNRE Scheme for Generation Based Incentive (GBI) for grid interactive Wind and Solar power projects VIII. Direct Discounting of MNRE Capital Subsidy payable to Accredited Channel Partners and State Nodal Agencies (SNA) for installation of Solar Water Heating Systems IX. Loan Scheme For Financing Rooftop Solar Pv Grid Connected/ Interactive Power Projects (Industrial, Commercial and Institutional) X. IREDA Scheme for discounting of Energy Bills **** IREDA s Financing Norms & Schemes _ June 2016 Page 4 of 36

6 3. GENERAL ELIGIBILITY CONDITIONS Eligible Entities/ Categories Private Sector Companies/ firms Central Public Sector Undertaking (CPSU) State Utilities/ Discoms/ Transcos/ Gencos/ Corporations Joint Sector Companies Applicants, registered in India, falling under any of the above categories, with borrowing powers and powers to take up new and renewable energy and energy efficiency projects as per their Charter, are eligible to avail financial assistance from IREDA except for the following: I. Trusts, Societies, Individuals, Proprietary concerns and Partnership firms (other than Limited Liability Partnerships, LLPs). However, they can be considered for financing only if they provide Bank Guarantee / Pledge of FDR issued by Scheduled Commercial Banks as described in RBI Act for the entire loan. II. Loss making applicants and / or, Applicants with accumulated losses (without taking in to account effect of revaluation of asset, if any) as per audited Annual Accounts of the immediate preceding financial year of operation. However, they can be considered for financing only if they provide security of Bank Guarantee / Pledge of Fixed Deposit Receipt (FDR) issued by Scheduled Commercial Bank as described in RBI Act for the entire loan. However, the provisions under (II) above shall not apply to the following -- a. Loss incurred due to preliminary & preoperative expenses in the case of projects promoted by Special Purpose Vehicle (SPV) b. Loss due to depreciation in the case of take over loans c. Companies posting loss due to de-merger /merger/ acquisition /amalgamation d. Loss due to booking of one time expenditure provided they are otherwise profit making. III. Applicants who are in default in payment of dues to Financial Institutions, Banks, NBFCs and/or IREDA. IREDA s Financing Norms & Schemes _ June 2016 Page 5 of 36

7 IV. Applicants/ Group Companies and/or Core promoters of the applicant company who a. Default in payment of IREDA dues and/ or, b. Classified as willful defaulters as defined by RBI/ classified by other FIs and/ or, c. Had availed OTS from IREDA and/ or, d. Convicted by court for criminal/ economic offences or under national security laws V. Greenfield Projects involving second-hand equipment and machinery. ***** IREDA s Financing Norms & Schemes _ June 2016 Page 6 of 36

8 4. MINIMUM LOAN AMOUNT The minimum loan eligibility from IREDA will be Rs.50 Lakh unless specifically exempted under any scheme/ programme. ***** IREDA s Financing Norms & Schemes _ June 2016 Page 7 of 36

9 5. PROMOTER CONTRIBUTION, QUANTUM OF LOAN, MORATORIUM AND REPAYMENT PERIOD The typical financing norms relating to maximum moratorium, quantum of loan, repayment period and minimum promoter contribution, in brief, for different type of eligible projects are given below: Minimum Promoter Contribution, Quantum of loan & Maximum Debt Equity Ratio a) The quantum of loan from IREDA shall be normally upto 70% of the total project cost. b) Typically, the minimum promoter contribution shall be 30% of the project cost and the maximum Debt Equity Ratio (DER) shall not be more than 3:1 c) However, in case of Solar & Wind Sector projects, IREDA may consider the minimum promoter contribution as 25% of project cost and may extend loan up to 75% of the project cost subject to meeting the following conditions: o In case of repeat borrowers of IREDA with an operational RE/EE project, should have a good track record w.r.t. repayment to the satisfaction of IREDA. o In case of New companies/spv, the average Debt Service Coverage Ratio (DSCR) of the project should not be less than 1.3. d) All government supported RE Projects, we may follow the guidelines of respective schemes w.r.t. treatment of such assistance as Promoter contribution/quasi Equity. e) For all SDF supported Bagasse-based Cogeneration Projects, IREDA may treat the SDF Loan as Promoter s Contribution f) Under the bridge loan scheme for SDF supported Bagasse based Co-- generation Projects, in case of existing and Profit Making Sugar Companies (at least for last 3 Financial Years.), IREDA can provide finance Equivalent to SDF loan limited to total IREDA loan exposure up to 90% of the project. g) In case of medium and large hydro projects, where IREDA can finance a project under consortium/ co-finance with other lenders, its debt support would not exceed 50% of project cost. h) For IREDA funded biomass projects, IREDA can finance biomass fuel processing machines upto 75% of equipment cost. The eligible components are baler, shredder, choppers, tractor with front end loader and trailer. i) IREDA can finance biomass gasification projects (>=1000 kwth) up to 75% of equipment cost. This loan is only available for captive use of thermal applications. IREDA s Financing Norms & Schemes _ June 2016 Page 8 of 36

10 5.2 Moratorium & Repayment Period a) The repayment periods shall be maximum of 10 to 15 years, depending on the project cash flows & DSCR of the project and it shall be after the construction & grace periods. However, IREDA shall charge an additional interest of 0.25% p.a. (the same is not applicable for projects under Wind & Solar Energy Sectors) over and above applicable rate of interest rate on total loan for the projects whose repayments periods are more than 12 years. b) The grace periods shall be 6 months to 1 year from the date of COD of the project. c) In case of financial assistance under Securitization of Future Cash Flows, the moratorium and repayment periods would be as follows: Sector Moratorium Repayment Years Period (Years) Securitization of future cash-flows -- 8* * 10 years in case of Hydro Power projects. IREDA s Financing Norms & Schemes _ June 2016 Page 9 of 36

11 6. CREDIT RATING, INTEREST RATES & RESET I. Credit Rating & Interest Rates IREDA conducts credit rating for all grid connected projects and provides grading in a band of 4 grades (I, II, III & IV) based on the risk assessment. The interest rates are linked with the grades. The interest rates are fixed by a Committee for fixing interest rates. The current applicable interest rates are as given below (w.e.f ) S.No. Borrower/Sector GRADE I GRADE II GRADE III GRADE IV 1 Schedule A,'AAA' Rated PSUs 9.90 % 2 State Sector Borrowers 9.90 % % % % 3 LoC for Refinance and other Borrowing Cost +1.00% to 2.00%(Spread) 4 Roof top Solar 10.05% 10.30% 10.60% 10.90% 5 Wind Energy, and Grid % % 11.10% 11.40% Connected Solar PV, 6 Co-generation, Hydro and 10.50% 11.20% 11.45% 11.70% CSP 7 Energy Efficiency, Energy % 11.25% 11.65% 11.90% Conservation & Solar Thermal /Solar PV Off-Grid, Biomass Power and other sector 8 Manufacturing (All sectors) Existing units % Green Field 11.90% 1. Reduction in interest rates over and above the applicable interest rates by 25 bps, 20 bps and 15 bps for Grade I, Grade- II and Grade-III of external grading s respectively. (Irrespective of IREDA s internal grading) Except for serial no. 1& 2 of above. 2. Prompt payment rebate of 15 bps on the applicable interest rate, if the installments of interest and Principal are paid in full, on due dates Except for serial no.1 & 2 of above. The prompt payment rebate is applicable to projects wherein first disbursement is effected on (or) after Reduction in Interest rate over and above the applicable interest rates by 25 bps for Repowering of wind energy projects. IREDA s Financing Norms & Schemes _ June 2016 Page 10 of 36

12 4. Additional 0.50% over and above the applicable rate of interest shall be charged till the date of commissioning of the project other than Wind and Solar sector. No additional interest during construction for (i) Schedule- A, AAA rated PSUs (ii) State Sector Borrowers who are engaged in power sector and have successfully implemented not less than 200 MW of hydroelectric projects and implementing Hydro sector projects. 5. In case of loans sanctioned for manufacturing facilities, no additional interest during the construction period shall be charged. Notes: 1. Interest rates indicated above are variable and may be changed any time as and when decided by IREDA 2. Interest Rate prevailing at the time of each disbursement shall apply Rebate in Interest Rate In the event of Borrower furnishing security of Bank Guarantee/ pledge of FDRs from scheduled commercial banks as described in RBI Act, or Unconditional/ Irrevocable guarantee from All India Public Financial Institutions with AAA or equivalent rating - equivalent to the amount sanctioned by IREDA, the following shall apply - For CRRS Rated Projects: Interest rate charged will be as applicable for Grade I borrowers. For Projects not covered under CRRS: 1% rebate in applicable interest rates. Exclusions (Rebate in Interest Rates) (i) BG/ FDR provided against debt service reserve money (DSRM) as per requirement of Trust & Retention Account (TRA) (ii) BG / FDR provided towards collateral security/ Loan against promoter s contribution. Prompt payment Rebate A rebate of 15 bps may be passed on the applicable interest rate to the borrower, if the installments are paid in full, on due dates. This would be applicable for all sectors, from the date of board approval i.e , to projects wherein first disbursement is availed on (or) after IREDA s Financing Norms & Schemes _ June 2016 Page 11 of 36

13 Bridge Loan Scheme for SDF supported Bagasse based Cogeneration Projects Additional interest rate of 1% over and above the applicable interest rate shall be charged for the bridge loan Loans against Securitization of future cash flows of existing RE projects (Corporate Loan) Additional interest rate of 1.25% over and above the applicable interest rate shall be charged Applicable Interest in case of default in payment In case any borrower defaults in payment of principal and /or interest and is classified as NPA in terms of IREDA s accounting policy and was assigned grade better than Grade-IV at the time of sanction, the rate of interest to be charged for such loans would be applicable interest rate for Grade IV of the sector at the time of default or applicable rate of interest for the project at the time of sanction/ reset whichever is higher. The higher interest rate will be charged till the loan gets upgraded to standard category. II. RESET The rate of interest prevailing at the time of each disbursement shall be applicable corresponding to the CRRS rated grade at the time of sanction. The interest rate shall be subject to reset on commissioning of the project or 2 years from the date of first disbursement whichever is earlier and thereafter every 2 years. In case of projects commissioned prior to first disbursement, the first reset will be 2 years from the date of first disbursement. Projects not covered under CRRS rating will also have interest rates prevailing at the time of each disbursement apart from Reset guidelines as mentioned above. Note: o Reset periods are subject to change. o Re-rating of the project will be carried out (except on the date of COD reset) by IREDA on its own on interest reset dates subsequent to COD. At any other time, the borrower will have the option to get the project re-rated by paying applicable fee of Rs. 5 Lakhs, plus service tax & education cess. o Thereafter, the revised rating and the corresponding interest rate would be applicable for the next 2 year s period. ***** IREDA s Financing Norms & Schemes _ June 2016 Page 12 of 36

14 7. SPECIAL EFFORTS & CONCESSIONS RELATING TO SPECIAL STATES/ BACKWARD/ RURAL AREAS, SC/ST, WOMEN ENTREPRENEURS, ETC. Due encouragement and efforts are made to assist promoters in the backward/rural areas and falling in SC/ST, Women, Ex-Servicemen and Handicapped categories. The details are as follows: Notes I. Entrepreneurs belonging to SC/ST, Women, Ex-Servicemen and Handicapped Categories (applicable only for projects involving project cost up to Rs.75 lakhs) Rebate of 0.5% p.a. in interest rate Exemption from payment of the following:- o Registration Fee o Front End Fee o Inspection charges o Expenditure on Nominee Directors Concession of 5% in promoters contribution The definition of SC/ST, Women, Ex-Servicemen and Handicapped Entrepreneurs would be as under: (1) For Companies incorporated under Companies Act and Co-operative Societies Act More than 50% of equity share holding/share capital should be with SC/ST/women/ Ex-Servicemen and Handicapped entrepreneurs singly or jointly; and Enterprise to be managed by SC/ ST/ Women/Ex-Servicemen/ Handicapped i.e. management vests with the SC/ST/Women/Ex- Servicemen/ Handicapped in the form of majority in the Board of Directors/Governing Body (2) For Societies and NGO Majority of members are SC/ST/women/ex-servicemen/handicapped. Management vests with the SC/ ST/ Women/ Ex-servicemen/ IREDA s Financing Norms & Schemes _ June 2016 Page 13 of 36

15 Notes Handicapped in the form of majority in the Governing Body /Council /Board II. Special efforts & concessions for entrepreneurs setting up Projects in North Eastern States, Sikkim, Islands, Estuaries and Jammu & Kashmir Rebate of 0.5% p.a. in interest rate 50% Exemption from payment of the following:- o Registration Fee o Front-end fee o Inspection Charges o Legal Charges (other than incurred for Recovery) o Expenditure incurred on Nominee Director (s) In case the entrepreneurs belonging to SC/ST/ Women/ Ex-Servicemen/ Handicapped category, additional concessions, if any, available for this category will also be available The definition of Islands, Estuaries would be as notified/ announced/declared by way of Gazette/Government Order/Circular/Executive Order/Specific clarification letter by Competent Authorities of Central/State Government/Local Authorities All interest concessions/rebates will be available on the condition that the Borrower pays the installments of loan and interest on or before due dates. This will not apply to rebate for providing Bank Guarantee ***** IREDA s Financing Norms & Schemes _ June 2016 Page 14 of 36

16 8. POLICY ON PRE-PAYMENT IREDA has a policy for pre-payment of the loan/ conversion of Interest to Present Lending Rate. Pre-payment of loan in full/part is permissible subject to prior written notice of minimum 30 days and payment of the pre-payment premium by the borrower. In case a borrower proposes to continue to avail the loan facility from IREDA but desires that the documented Interest rate be converted into the Present Lending Rate applicable to a particular grade/ sector, the same shall also be considered by IREDA subject to Pre-payment Premium. The basis of calculating the pre-payment premium shall be as under: I. Pre-closing the loan When the interest rate is not reset during the loan period a) The stream of cash flows for the pre-payment period has to be worked out based on the document rate and current lending rate for the sector, for the period b) The differential Interest (disbursement rate less the current lending rate applicable to the borrower) cash flows are discounted on daily basis by taking the prevailing Present Lending Rate as discount factor c) The Pre-payment Premium as calculated in (b) above, shall be charged subject to minimum premium amount of 2% of the loan outstanding. Exclusions: The above shall not be applicable in case the loan is pre-closed partly/ fully out of capital subsidy / grant. The above is not applicable in respect of projects where the loan agreement provides for specific pre-payment conditions. II. In case borrower continues loan with reduced rate of interest i.e., current lending rate for sector a) Calculate the premium as per the procedure mentioned at I (a) and I (b) above b) 50% of the Premium as calculated in II (a) above shall be charged. In case of projects where the interest subsidy is sanctioned by Ministry of New and Renewable Energy, then the same is subject to compliance of conditions as stipulated therein c) The conversion of rate of interest to present lending rate may be permitted more number of times during the tenure of the loan subject to compliance of condition in II (b) above IREDA s Financing Norms & Schemes _ June 2016 Page 15 of 36

17 III. If a borrower pre-closes the loan after availing the facility of conversion of interest to present lending rate In case the borrower opts to pre-close the loan, at any time, in future, after availing reduction in interest rate as above, it has to pay premium being the difference between the original documented rate and the present lending rate at the time of pre-closure (the premium payable shall be as per para I above). The premium paid, as indicated in para II (b) above shall, however, be adjusted out of the premium so worked out. IV. Prepayment at the time of subsequent reset after COD (excluding reset on COD): The prepayment premium may not be charged for prepayments upto 50% of loan outstanding made within 30 days of subsequent interest reset after COD and to charge prepayment premium on balance 50% of loan outstanding, as per existing guidelines. V. Partial pre-payment If a borrower makes any partial pre-payment of loan during the pendency of the loan period over and above the normal repayment of the installment, the said pre-payment shall not attract any prepayment charges subject to: a) Not more than 10% of the loan outstanding in one financial year shall be allowed to be partially closed. b) The said partial prepayment should be made out of internal accruals/surplus revenue of funds from the project only. The borrower shall satisfy IREDA with documentary evidence in this regard. c) Over and above 10% if a borrower opts to pre-close the balance loan outstanding in one lump sum at any point of time subsequent to the partial prepayment, it shall be liable to pay the prepayment premium in the same manner as indicated in Para I and Para II above. ***** IREDA s Financing Norms & Schemes _ June 2016 Page 16 of 36

18 9. CHARGES FOR LIQUIDATED DAMAGES I. Default in payment of interest or any monies due will attract interest at the same rate as on the principal loan amount. II. In case of default in payment of installments of principal, interest and all other monies (except liquidated damages) on due dates, liquidated damages, at the rate of 2.50% p.a. over and above the applicable rate of interest for the projects shall be payable III. The additional interest by way of liquidated damages for non-payment of interest and repayment of principal is calculated on daily basis. The number of days in a year being calculated as 365. ***** IREDA s Financing Norms & Schemes _ June 2016 Page 17 of 36

19 10. SCHEDULE OF FEES I. Processing Fee Loan applied Upto Rs.1 Cr. Above Rs.1 Cr. & up to 20 Cr. Above Rs.20 Cr. and up to Rs.40 Cr. Above Rs.40 Cr. Registration Fee per application Rs.10,000/- plus service tax & education cess, as applicable Rs.30,000/- plus service tax & education cess, as applicable Rs.50,000/- plus service tax & education cess, as applicable Rs.60,000/- plus service tax & education cess, as applicable II. Front-end Fee The borrowers will have to pay front-end fee within 6 months of issuance of sanction letter and in any case before signing of the loan agreement as below: Loan slab Front-End- Fee (% of loan amount) Upto Rs 5.00 Cr. 0.50% of loan amount Above Rs 5.00 Cr. For loan above Rs. 5 Cr. and upto Rs. 100 Cr.: 1% of the loan amount. For loans above Rs. 100 Cr. : 1% of First Rs. 100 Cr. plus 0.25% for the balance loan amount above Rs. 100 Cr. This amount will have to be paid on sanction before signing of the Loan Agreement or as stipulated and is normally non refundable. The amount of frontend fee can be included as a part of the project cost. Notes 20% rebate in front end fee shall be applicable if paid within 60 days from the date of IREDA sanction letter. The 60 days for this purpose will not be generally counted from the date of issue of any amendatory letter issued to borrower subsequent to original sanction letter. However, the date of revised sanction/ amendatory letter may be considered, if the revised sanction has material changes having financial implications such as rate of interest, repayment period, pre-payment premium or security conditions, etc. If the revised sanction letter is only for clarificatory changes or not having any implication, as accepted by the client, the original date of sanction to be considered. IREDA s Financing Norms & Schemes _ June 2016 Page 18 of 36

20 Applicable front-end fee for take over loans shall be 50% of the applicable front end fee. The applicability of 20% rebate in front end fee as mentioned above, will not be available for takeover loans. In case of State Nodal Agencies, the rate of front end fee will be 0.5% irrespective of loan slab. Additional loan, if sanctioned will also be governed by above table with reference to total loan amount, but front end fee shall be chargeable on the additional loan component III. Re-schedulement Fee IREDA normally does not allow rescheduling of installment(s) of loan as incorporated in the Loan Agreement. The application for re-schedulement /restructuring shall accompany with application fee of Rs. 1 Lakh, plus service tax, educational cess, etc. IV. NOC Fee for sharing existing charge on assets IREDA would charge a lump sum fee of Rs. 1 lakh plus service tax & education cess as applicable for issuing NOC for existing charge on assets V. Fee for sharing of Appraisal IREDA would charge fee of Rs.1 Lakh, plus service tax & education cess as applicable, for sharing of Appraisal Report. The sharing of Appraisal Report will take place if the project envisages co-financing arrangements and/ or requirement of working capital at the time of appraisal of project by IREDA. VI. Fee for Issuing of Comfort Letter (Letter of Credit) IREDA would charge 0.50 % of amount of comfort letter plus service tax & education cess as applicable for issuing of comfort letter. VII. NoCs Fee for Merger/ Amalgamation/ Foreign Participation etc. IREDA would charge fee of Rs. 5 Lakhs, plus service tax & education cess as applicable, for issuance of NOC towards merger/amalgamation/foreign participation etc. VIII. Re Rating Fee at the time of Reset Re-rating of the project will be carried out (except on the date of COD reset) by IREDA on its own on interest reset dates subsequent to COD. At any other time, the borrower will have the option to get the project re-rated by paying applicable fee of Rs. 5 Lakhs, plus service tax & education cess. **** IREDA s Financing Norms & Schemes _ June 2016 Page 19 of 36

21 11. NORMS UNDER CONSORTIUM/CO-FINANCING In case of co-financing / consortium financing or any other structured financing, IREDA s lending can be aligned with terms and conditions of lead FI/ Banks **** IREDA s Financing Norms & Schemes _ June 2016 Page 20 of 36

22 12. NEW FUND AND NON FUND BASED FINANCING SCHEMES A. Line of Credit to Non-Banking Financial Companies (NBFCs) for on-lending to RE/ EEC Projects. Eligibility NBFCs/ State Govt. Financial institutions & corporations. The NBFCs should have atleast AA+ rating and in case of private sector financial institutions/companies they should also have valid registration with RBI. It should have disbursed loans not less than Rs. 20 Cr for Renewable Energy sector in the last financial year. Capital Adequacy Ratio (CAR) should be in conformity with the prescribed RBI Norms Gross NPA should not normally exceed 5% of entire portfolio. The existing Debt Equity Ratio of NBFC should not be more than 5:1. However DER more than 5:1 can be considered against the security of BG/FDR for 100% loan amount issued by Scheduled Commercial Banks The NBFCs should have adequate systems & procedures in regard to appraisal and recovery of loans. Interest Rate: The interest rates vary from time to time. The current interest rates applicable would be as follows: Borrowing Cost % (Spread) Repayment Period: 10 years + 1 year moratorium Fund utilization period: 3 years from date of Loan Agreement. Mode of Disbursement: On Reimbursement Mode Annual Commitment Fee: date of loan agreement) 0.1% p.a. upfront on outstanding amount (w.e.f Security Conditions Line of Credit from IREDA would be secured by a Charge (exclusive/first pari passu charge) as may be required, on the book debts of the NBFC (OR) Any other securities as per the financing norms of IREDA. IREDA s Financing Norms & Schemes _ June 2016 Page 21 of 36

23 B. Short term loan assistance to RE Developers /Suppliers /Contractors Eligibility As per Financing Norms of IREDA Interest Rate: Highest int. rate of the sector + 1.5% Quantum of Loan: As per financing norms of IREDA. Repayment Period: To be repaid within maximum period of 3-5 years from the date of 1st disbursement. Securities First/ Pari passu charge on the movable and immovable assets of projects (OR) In case of 2nd charge, one or more additional securities such as pledge of shares, mortgage of collateral property, corporate & personal Guarantees, Charge on revenue streams etc to the satisfaction of IREDA. C. Bridge loan assistance to RE Promoters/ Developers against Capital Subsidies/VGF/GBI available under various State/Central Govt. Schemes Eligibility As per financing norms of IREDA The applicants should submit unconditional letter of approval/comfort from concerned authorities for sanction/release of capital subsidies/vgf/gbi for the project under consideration. Interest Rate: Highest int. rate of the sector + 1% Repayment Period: As per government schemes/guidelines of sanction order. In case of GBI, the repayment period is 2 years from the date of first disbursement of Bridge loan. Securities First/ Pari passu charge on the movable and immovable assets of project (OR) In case of 2nd charge, one or more additional securities such as pledge of shares, mortgage of collateral property, corporate & personal Guarantees etc. to the satisfaction of IREDA. IREDA s Financing Norms & Schemes _ June 2016 Page 22 of 36

24 D. Underwriting of Debt/Loan Syndication Eligibility: As per financing norms of IREDA Extent of Exposure: It will be upto total debt requirement of the project subject to meeting exposure norms of IREDA. IREDA will prescribe a hold portion of loan commitment i.e. loan commitment of IREDA which IREDA intends to take on its own books of account. Remaining portion will be down sold to other banks/fis Interest Rate: The lending rates will be as per financing norms of IREDA as applicable from time to time. IREDA may have same or different interest rates for Debts to be retained and Debt earmarked for down selling Debt Equity ratio of the project IREDA may consider the projects with DER of 70:30. However, IREDA may consider higher D/E ratio in deserving cases by charging additional interest rates & security as per IREDA financing norms applicable from time to time. Underwriting Fee including Front End Fee: 1% of the underwritten amount. (The clause 10 of this document with respect to 20% rebate in front end fee, if paid within 60 days from the date of IREDA sanction letter is not applicable in case of Underwriting Fee ) Soft underwriting: IREDA will be obliged to take only hold portion on its books of accounts and remaining portion will have to be compulsorily down sold to participating banks/fis. In case of Soft Underwriting, the charges/fees, if any payable to the FIs/Banks to whom the loan is being Down Sold, may be shared from the above Underwriting Fee. The quantum/percentage of sharing will be on case to case basis, based on the quantum of the loan being down sold and the applicable fees of Bank/FIs. Hard underwriting: Commitment of IREDA for entire underwritten portion is legally binding even when remaining portion of debt has not been tied up. No fee sharing is applicable. Financial charges and other fees: The other charges, if any shall be payable by the borrowers, as per IREDA financing norms as applicable from time to time. Security: As per financing norms of IREDA. IREDA s Financing Norms & Schemes _ June 2016 Page 23 of 36

25 E. Guarantee Assistance Scheme to RE Suppliers/ Manufacturers / EPC Contractors Eligible Entities Suppliers/Manufacturers/EPC Contractors having established track record of successful implementation of RE projects of not less than 50 MW capacity in India. Extent of Guarantee: To cover tender bid security and or/advance payment received against the contract to execute the RE Project. Guarantee Fee (to be paid upfront): o Guarantee period upto 1 year: o Beyond 1 year and upto 3 years: 2.5% p.a. 3% p.a. Interest charges: In the eventuality of guarantee being invoked, highest Interest rate of that sector + 1% along with 2.50% LD Charges will be charged on amount outstanding, in addition to guarantee fee. Securities First/ Pari passu charge on the movable and immovable assets of project (OR) In case of 2nd charge, one or more additional securities such as pledge of shares, mortgage of Collateral security, corporate & personal Guarantees, charge on revenue streams, 3rd party Guarantee etc to the satisfaction of IREDA. F. IREDA to take up the role of lead FI under Consortium/Syndicated Loans/ Multi banking arrangements by charging Lead Fee. Background IREDA do take up the role of the Lead Financial Institution (FI) under Consortium / Syndicated Loan / Multi Banking Arrangements while financing Renewable Energy Projects. Fees Structure IREDA to take up the role of lead FI under Consortium/Syndicated Loans/Multi banking arrangements by charging the below mentioned Lead IREDA s Financing Norms & Schemes _ June 2016 Page 24 of 36

26 Fee, apart from the other applicable fees as per the guidelines. Consortium Loan Slab Lead Fee (% of Loan Amount) Upto Rs. 200 Cr. Above Rs. 200 Cr. 0.20% of the total loan amount 0.15% of the total loan amount (Subject to minimum of Rs. 40 Lakhs and maximum of Rs. 60 Lakhs) 50% of lead fees shall be payable by the borrower before the issue of letter by IREDA confirming to take up the role of Lead FI and rest 50% on the date of execution of Facility Agreement. In addition to the mentioned Lead Fee, Borrower shall reimburse all other expenses incurred, including expenses towards Security trustee fee, Independent engineer/consultant, Concurrent Auditor/ CA, Legal Counsel, Lender s Financial Advisor, Insurance Advisors, Consortium meetings, Service Tax, travel lodging, boarding, etc. G. Direct Discounting of MNRE Capital Subsidy payable to Accredited Channel Partners and State Nodal Agencies (SNA) for installation of Solar Water Heating Systems Purpose The credit under the bill discounting scheme will be available to MNRE Accredited Channel Partners (ACP), State Nodal Agencies (SNA) and other stake holders for purchase and installation of Solar Water Heating System (SWHS) as approved by MNRE Eligibility for Discounting of MNRE Capital Subsidy Claims MNRE Accredited Channel Partners, State Nodal Agencies (SNA) and other stakeholders as approved by MNRE, who have already submitted a valid claim of Capital Subsidy at IREDA, which is pending for release of payment on account of non- availability of funds, will be eligible under the scheme. The eligibility status is to be verified by the concerned group dealing with Capital subsidy claim at IREDA. Extent of Assistance Up to 80% of the existing pending eligible capital subsidy claim, as verified by the IREDA Minimum loan assistance Rs. 20 Lakhs. IREDA s Financing Norms & Schemes _ June 2016 Page 25 of 36

27 Determination of Loan Amount Based on verification by IREDA, regarding pending eligible claims of the applicant in line with existing Capital Subsidy policy. Interest Rate 0.90% p.m. (10.80% p.a) to be adjusted from the subsidy receipts from MNRE against the claim. Shortfall, if any, will be payable by the borrower on demand. For interest calculation purpose, last date of the month in which subsidy claim/ sanction is received at IREDA will be considered. Repayment Loan amount to be recovered out of capital subsidy received / to be received from MNRE. Shortfall, if any, will be recovered from the borrower, which will be payable on demand. Security Charge on capital subsidy receivables from MNRE. Special Condition The amount of loan assistance/ Bill Discounting Shall be within the unutilized funds of Government Budget/MNRE Scheme for installations of Solar Water Heating Systems (SWHS). In case it is felt that the recovery/payment of subsidy amount against which loan assistance has been provided is doubtful, borrower will be liable to pay on demand entire such amount including interest and other charges to IREDA. IREDA will also have the option to adjust its dues against any other claim of the borrower being handled by IREDA in case of any shortfall. Procedures The request of the borrower will be processed by the dealing group as per the existing procedures and practices followed at IREDA H. Direct Discounting of GBI Claims Payable to Renewable Energy Developers under MNRE Scheme for Generation Based Incentive (GBI) for grid interactive Wind and Solar power projects Background Generation Based Incentive (GBI) was announced by the Ministry of New and Renewable Energy (MNRE) for Grid Interactive Wind and Solar Power Projects IREDA s Financing Norms & Schemes _ June 2016 Page 26 of 36

28 with the main aim to broaden the investor base, facilitate the entry of large Independent Power Producers and to provide level playing field to various classes of investors. The GBI is provided over and above the feed in tariff approved by State utilities. Eligibility for Discounting of GBI Claims RE developers who have already submitted a valid GBI claim under GBI Scheme at IREDA, which is processed and pending for release of payment on account of non- availability of funds, will be eligible under this scheme. Extent of Assistance Up to 80% of the existing pending eligible GBI claim, as verified by the IREDA GBI group. Minimum loan assistance Rs.20 Lakhs. Determination of Loan Amount Based on verification by IREDA regarding pending eligible GBI claim of the applicant in line with existing GBI policy. Interest Rate 0.90% p.m. (10.80% pa) to be adjusted from the GBI receipts from MNRE against the claim. Shortfall, if any, will be payable by the borrower on demand. For interest calculation purpose, last date of the month in which GBI claim is received at IREDA will be considered. Repayment Loan amount to be recovered out of GBI proceeds received / to be received from MNRE. Shortfall, if any, will be recovered from the borrower, which will be payable on demand. Security Charge on GBI receivables from MNRE. Special Condition The amount of loan assistance/ Bill Discounting Shall be within the unutilized funds of Government Budget/MNRE Scheme for Generation Based Incentive (GBI) for Grid Interactive Wind & Solar Power Project. In case it is felt that the recovery/payment of GBI amount against which loan assistance has been provided is doubtful, borrower will be IREDA s Financing Norms & Schemes _ June 2016 Page 27 of 36

29 liable to pay on demand entire such amount including interest and other charges to IREDA. IREDA will also have the option to adjust its dues against any other claim of the borrower being handled by IREDA in case of any shortfall. Procedures The request of the borrower will be processed as per the existing procedures and practices followed at IREDA. I. LOAN SCHEME FOR FINANCING ROOFTOP SOLAR PV GRID CONNECTED/ INTERACTIVE POWER PROJECTS (INDUSTRIAL, COMMERCIAL AND INSTITUTIONAL) 1. Eligible Projects for Assistance I. Scheme is available for all Grid connected/interactive Solar PV projects located on Rooftops. II. Applications can be submitted under Aggregator Category and Direct Category. III. Aggregator Category: a. Application can include either single project or aggregate multiple projects. b. Minimum project capacity to be submitted shall be at least 1000 kwp. c. Minimum capacity of sub projects under this mode shall not be less than 20 kwp. IV. Direct Category: a. Applicants shall include projects from single roof owners only. b. Minimum project capacity to be submitted shall be at least 1000 kwp. V. General Applicant Eligibility norms. As per Chapter 3 of this document with respect to General Eligibility conditions for applicants. 2. Application documentation a. Applicants shall be required to submit loan application forms alongwith all attachments of required documents as per detailed checklist. IREDA s Financing Norms & Schemes _ June 2016 Page 28 of 36

30 Application forms and checklist is available at IREDA website. b. Applicants shall be required to submit external credit rating under Rooftop Grading System from empanelled credit Rating agencies of IREDA. c. Projects can be located on single or multiple roofs. In case of multiple owner roofs, the same should be located within the geographical boundary of the district/single discom. (Single contiguous roofs are generally encouraged/ preferred.) d. Projects under one application shall be required to be based on single revenue model. e. All Projects shall be required to comply with minimum technical standards as per MNRE /CEA guidelines for rooftop solar/distributed generation CEA (Technical Standards for Connectivity of the Distributed Generation Resources) Regulations f. Applicants shall follow following general guidelines for Rooftop lease, Private PPA agreements. - Submit copy of legal document establishing roof ownership rights. - Provision in Roof lease for free access to roof (project site) to system owner/contractor, IREDA/its authorized person during the currency of IREDA s loan. - Provision in Private PPAs for Payment security mechanism (i.e. BG/revolving LC for 2 billing cycles) assignable to IREDA. - Provision in Roof lease for No termination clause during the currency of IREDA s loan except under force majeure/performance. However, termination clause may be stipulated with appropriate termination payment which shall be either equal to or more than loan outstanding at the time of invocation of clause. - Under third party PPA, applicant/ roof owner shall ensure that off-taker shall more than 80% of sanctioned load demand and is profitable Profit & Loss accounts for last 2 financial years. IREDA s Financing Norms & Schemes _ June 2016 Page 29 of 36

31 3. Credit Rating, Interest Rates etc. IREDA shall conduct credit rating for all grid connected projects and provides grading in a band of 4 grades (I, II, III & IV) based on the risk assessment. The interest rates are linked with the grades. a) The present applicable interest rates range from 10.05% to 10.90% b) Additional 0.50% over and above the applicable rate of interest shall be charged till the date of commissioning of the project. c) External Credit Rating All applicants shall be required to obtain credit rating from external rating agencies under the IREDA Rooftop Rating Model (IRRM) from empanelled Credit Rating Agencies. Applicants under aggregator and direct category shall be rated on various sector specific parameters including sponsor strength as project promoter. d) Maximum repayment period for the loan shall be up to 9 years, with the moratorium period of 12 months from the date of COD of the project. The maximum construction period shall be 12 months from first disbursement. e) COD of the project shall be considered from the date of commissioning of complete capacity as per application. f) Quantum of loan from IREDA shall be 70% of the project cost with minimum promoter s contribution of 30%. However, IREDA may extend loan upto 75% of the project cost on the basis of the creditworthiness of the promoter, track record, project parameters etc. as per the Financing Norms and Operational Guidelines of Rooftop Scheme. 4. Project Monitoring & Provision of Lender s Engineer IREDA shall engage lender s engineer from IREDA s empanelled list of Lender Engineers for monitoring and quality assurance, safety issues in project construction and operational monitoring. Broad Roles and Responsibilities of LE shall include the following. a) Lender s engineer shall also provide its independent recommendations/comments on the quality and performance of IREDA s Financing Norms & Schemes _ June 2016 Page 30 of 36

32 project for minimum three instances i.e. one each at Pre- sanction, during construction and project commissioning. b) Lender s Engineer shall review pre sanction techno commercial feasibility including existing shadow profile, construction progress, and project commissioning & completion report. c) Lender s Engineer shall monitor compliance of applicable EHS norms including fire safety clearance on project site during construction and post commissioning. d) Lender s Engineer shall submit performance review of commissioned projects vis a vis envisaged at the time of appraisal/epc contract and give its final Completion Report including its Recommendations and Observations. 5. Other Norms Following Revenue Models shall be generally considered for the projects. i. Captive Power Generation of roof owner. System aggregator and roof Owners shall enter into roof lease and O&M agreement for guaranteed solar generation. Direct applicants shall be required to submit O&M agreement for loan tenor or performance guarantee if self. ii. Sale to Grid under Net Metering /PPA. Roof Owners enter into agreement with discom and aggregator as per Net metering policy. iii. Sale to Grid under Gross Metering PPA. Aggregator enters into agreement with discom/third party and roof owner under Applicable solar Policy. iv. Distribution licensee/ Govt. / Semi Govt bodies provides appropriate funds. The DISCOM/Govt/Semi Govt bodies may appoint Aggregator to implement the Solar Facilities on its behalf for implementing projects. v. Other revenue models shall also be considered depending upon viability. IREDA s Financing Norms & Schemes _ June 2016 Page 31 of 36

33 vi. Following Project ownership Models shall be considered for the projects. a. Rooftops under the project are owned by single party. Either Aggregator or direct user can apply for loan. All project related agreements shall comply with conditions for roof lease and project PPA. Project s revenue model can be structured under any of the revenue based models as mentioned above, however all projects under the application shall be based on single revenue model. b. Rooftops and Projects owned by multiple parties. Application shall be through aggregator only. Project shall be structured under solar lease model/ any other alternative revenue model notified above. All project related agreements between aggregator and roof owners shall comply with conditions for roof lease and project PPA. b. Applicant shall be required to submit structure load bearing capacity, seismic load safety and wind load safety reports for highest wind speeds in the region for all sub projects from Structural expert/engineer/civil engineer empanelled with local Govt authority/town Planning authority/municipal Corporation. c. Regular Disbursement on pro rata basis shall be done as per the physical and financial progress of the project. Disbursement through reimbursement mode may be taken at sub project level. d. All other terms and conditions shall be as per IREDA s existing Financing norms. IREDA s Financing Norms & Schemes _ June 2016 Page 32 of 36